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History and Ownership

Peugeot as a brand-name has been around for over 200 years starting as humble blacksmiths and diversifying over time into a range of domestic products such dining-table condiments - which are still manufactured elsewhere under licence from Peugeot.  A significant turning point was into road transport with the manufacture of Peugeot bicycles and motor-assisted bicycles (mopeds), then the manufacture and sale of cars, small and larger commercial vehicles which continue to this day.  While Peugeot is based in France it manufactures increasingly overseas - from Germany to China with many stops in between.

Notably, Peugeot family members have featured in the management of the company since inception, a fact which has irked certain groups of individuals and the French Government over the years - the French Government interfering with the financial balance of the company by insisting upon changes of strategy - for instance the bankrupted Citroen brand was forcibly backed into the Peugeot Motor Company.  In recent years following a temporary profitability/cash crisis, Chinese Corporation and French government funds and shareholdings were introduced, simultaneously reducing the Peugeot family influence.  This quasi-political manoeuvring uncomfortably mirrors that interference undergone by the ‘British Leyland Motor Corporation’ and predecessors experienced from the 1950’s onward to their demise.   Fortunately, stability now reigns within Groupe Peugeot and it is hoped this will be permanent.  Governments and their politicians need to recognise that interfering in corporations is way outside their areas of expertise and will only have negative results.  A Parallel to Brexit?

Current major car/LCV brands held by Groupe Peugeot include Citroen, DS, Vauxhall, Opel (Vopel) and it is currently rumoured that following recent structural management problems at FCA (Fiat-Chrysler Group) following the unfortunate demise of Marchionne, additional brand(s) could be integrated into Groupe Peugeot.  Also in recent days (late March 2019) Jaguar-Land Rover has been rumoured as a possible acquisition target.  However, it is difficult to envisage just how far management would need to be stretched and diluted to span this wide collection of brands - let alone finance them adequately.  To underpin this, industry observers still have some difficulty in understanding significant financial benefits from the purchase of Vopel from General Motors in the short and medium term, and are thus still struggling with the efficacy of the FCA and JLR rumours.  Vopel brings additional unused production capacity across Europe and Asia, suggesting Peugeot may have plans to in due course consolidate production into the more responsive and cost-efficient plants, something they have been attempting in recent years.

CEO (Carlos Tavares) was parachuted into the Peugeot Group in 2014 following the latest French re-structuring and re-organisation of the Citroen-Peugeot company referred to above.  Tavares has supervised sweeping changes to model profitability and initially the loss-leaders were axed - primarily the much-loved RCZ, 208cc and 308cc models which despite being sold at a loss were giving the Peugeot brand in particular, a much-needed enhancement of a shaky brand reputation.  Factory closures have ensued, with manpower slowly trimmed towards international standards - limited often by current French employment standards.  The immediate result was approval by the French Stock Market and together with revaluation of assets and removal of a pile of loan interest,meant a swift return to operating profitability, and although fragile appears to be improving, despite industry and wider economic down-trends.

Brands and Brand Equity

Citroen (in Edit and process)

DS Links to current car road tests……..DS 7, DS 3

Peugeot (in Edit and process)

Vauxhall-Opel (in Edit and process)

Distribution Networks - UK

Manufacturer/brand operations are generally keeping their physical distance from retailers.  A number of direct ‘sales’ sites via the internet including social media in which finance schemes and ‘special editions’ are push-sold.  Sales are channelled through local dealers after the transaction price is virtually set in stone - thus insulating PSA from the vagaries of used car trading and the retail customer who is still typically regarded as ‘dirty’ despite Peugeot talking ‘at’ them via social media.

At retailer level, there is a complex and uneasy mix of competing solus dealers, small dealer groups and Succursales (PSA - owned retail outlets operating ambivalently towards inde owners within their own networks and using pricing techniques unavailable to struggling inde retailers).  Service points would appear to be a logical and simple customer convenience but do not appear to be supported in the UK despite attrition of full-service retail dealers, although service-only outlets operate in the French home market.

Retailer (physical) standards of a traditional character are vigorously enforced.  This has caused too many dealer defections in important markets, leaving total market share withering on the vine.  Buyers consider the complexity/cost of reaching franchised service points, and the frequency required, which may be somewhat greater than average.

Customer Experience

The following opinions are taken from analysis of customer interviews, our own Omnibus Survey data, discussions with independent service shops and dealer groups, thus generalised trends are discernable from this data.  They should still not however be considered to be exhaustive.

Retail coverage and quality has led to too many retail and fleet customer defections from the mainstream Peugeot and Citroen brands. This is coupled with real and persisting rumours of product quality and reliability concerns.  This is particularly focused upon unreliable electronics and a range of in-house engines co-designed alternately with Ford and BMW, which operate at very high specific outputs (a racehorses need excellent nutrition).  Through the Ford collaboration (Gemini) customer engines are (or were) supplied in significant volumes to Mazda, Mitsubishi, Tata and Geely group brands - all of which except Ford have now made alternative arrangements following brand ownership changes.

There are clear signs that following a concerted programme within the whole Groupe Peugeot, product design, specification and build quality is leading to very high quality and reliable vehicles within their respective markets, although in typical ‘Brit’ fashion, pub talk says any French product is to be avoided at all costs.  Brits LOVE pub talk!